The cryptocurrency market has recently faced a new trend — non-fungible tokens (NFT). NFT is a type of unique non-identical digital assets, which are not subject to an equivalent exchange. Experts are inclined to believe that NFT tokens can create another boom in the market, like ICO or Defi once did. Experts’ opinions on the ability of NFT to compete with Defi tokens and the possibility of making money on this asset vary.
For example, billionaire Mark Cuban noted in the AMA session that the segments of decentralized finance (Defi) and non-fungible tokens (NFT) are doomed to become popular cryptocurrency market for the next few years.
At the beginning of the year, NFT sales in US dollars exceeded the $100 million point. Obviously, the NFT market is in the spotlight now as never before; that’s why this trend should develop rapidly. There are forecasts that by the end of 2021, the total NFT volume will consist of $500 million.
Mark Cuban recommended not to despair and believe in their assets to those who have negative balances. As a worthy example, he cited bitcoin holders who bought the legendary cryptocurrency at its peak in 2017 and observed its rapid decrease. However, the holders did not dump the asset because they believed in it. And as a result, the situation has dramatically changed for the better.
The investor emphasized the prospects of digital assets, adding that he would choose a digital asset rather than a lottery ticket.
Defi contrasts itself with traditional banks, controlling customer funds. Banks are pretty free in this aspect: they can freeze money, close an account, refuse to provide a loan, transfer financial data to third parties, etc. The bank knows everything about the client: a place of residence, salary level, etc. If the bank closes, the client could hardly return the funds. Becoming a bank client, a user loses control over his own money and sacrifices his privacy.
Defi greatly contrasts. Applications are built on a public blockchain (usually Ethereum) to not control any central organization. Funds are placed on a smart contract, while private keys remain with users. The main interaction model is peer-to-peer: participants lend to each other, send money directly, trade with each other — without intermediaries.
NFT has good prospects of becoming a digital signature or identification element for legal documents, for example, inheritance rights or the sale of the property. Since this is a token, it can be later resold. In this regard, real estate transactions can be carried out instantly with a full transfer of ownership. There arises an opportunity for speculation.
NFT can be applied as an investment plan with a unique set of characteristics or rights for other tokens, as well as property ownership rights.
We are on the verge of a transformation of NFT and Defi: integrating these technologies will possibly solve many problems and shortcomings of the modern cryptocurrency market infrastructure.